Information Systems and the Modern Organization (Chapter 2)

Information Systems and the Modern Organization

Business Processes :

Business process : is an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customer.

• One Functional Area Processes
• Cross-Functional Area Processes

Business Process Reengineering & Business Process Management :

Measurement of competitive performance in an organization :

# Customer satisfaction.

# Cost reduction.

# Cycle and fulfillment time.

# Quality.

# Differentiation.

# Productivity.

Business Process Reengineering (BPR): a radical redesign of an organization business process that improve  its efficiency and effectiveness. The key to BPR is for enterprises to examine their business process from a "clean sheet" prospective and then determine how they can best reconstruct those processes to improve their business function. 

Many organization found that BPR strategy is too difficult, too radical and too comprehensive.

Business Process Management (BPM): is a management technique that includes methods and tool to support the design, analysis, implementation, management, and optimization of business processes.

BPM help companies :

• to improve profitability by decreasing cost and increasing revenues
• Create competitive advantage by improving organization flexibility
• Increase customer satisfaction.   

Components of BPM are :

• Process modeling.
• Web-enabled technologies.
• Business activity monitoring.

Business Pressures, Organizational Responses, and Information Technology Support :

Business Pressures : The combination of social, legal, economic, physical, and political factors in which business conduct their operations.A significant changes in any of these factors will create a business pressure on the organization.

Type of business pressures :

• Market Pressures.
• Technology Pressures.
• Social/Political/legal Pressures.

Market Pressures :

★Globalization : 

Globalization : is the integration and interdependence of economic, social, cultural, and ecological facets of life made possible by rapid  advances in information technology.

The three eras of globalization identified by Friedman :

1) Globalization 1.0 (1492-1800)⇨(focus on countries)⇨the force behind globalization was how much muscle, horse power, wind power, or steam power a country could deploy.

2) Globalization 2.0 (1800-2000)⇨(focus on companies)⇨the force behind globalization was the emergence of multinational companies.

3) Globalization 3.0 ( around the year 2000)⇨(focus on groups & individuals)⇨globalizaton has been driven by the convergence of 10 forces that Friedman calls "flatteners".

Examples of globalization :

     ➡Regional agreements such as North American Free Trade Agreement (NAFTA) & European Union (EU)

     ➡BRIC.

     ➡Moving to low Labor Cost countries.

     ➡Outsourcing/Offshoring.

★The Changing Nature of the Workforce :

✔Workforce in developed countries becoming more diversified.

✔Increasing number of women, single parents, minorities, and person with disabilities are now working in all type of positions.

✔IT enabling people to work from home (Teleworking).

★Powerful customer :

Customer expectation increase as customers become more knowledgeable about the products and services they acquire. Customer use Internet to find information about product and service, to compare price, and to purchase items at e-auctions

Companies struggle to learn about their customers to better address their needs. This process called Customer Intimacy which is a component of Customer Relationship Management(CRM).

Technology pressures :

Technological Innovation and Obsolescence :

New and improved technologies rapidly create substitutes for products, alternative services, and superb quality.

e.g : New versions of smartphons & Apple ipad.

Information Overload :

The amount of information available on the Internet doubles approximately every year and much of it is free. Search engines and business intelligence applications enable managers to access, navigate, and utilize vast amount of information.

Social/Political/Legal Pressures :

↘Social Responsibility :

▶Some corporations and individuals are willing to spend time and money to address different social problems. These efforts known as organizational social responsibility or individual social responsibility.

e.g : Green IT.

▶Digital divide : refers to the wide gap between those who have access to information and communications technology and those who do not.

↖Compliance with Government Regulations :

Regulation regarding health, safety, environmental protection , and equal opportunity. Business view government regulations as expensive constraints on their activities.

↘Protection against Terrorist Attacks :

IT can help protect business by providing security systems and possibility identifying patterns of behavior associated with terrorist activities, including cyber attacks.

↖Ethical Issues :

The use of IT raises many ethical issues ranging from monitoring e-mail to invading the privacy of millions of customers whose data are stored in private and public databases.

Organizational Responses :

☆Strategic Systems :

Provide organizations with advantages that enable them to:

➡Increase their market share and/or profits.

➡Better negotiate with suppliers.

➡prevent competitors from entering their market.

☆Customer Focus :

Organizations try to provide superb customer service can make the difference between attracting and keeping customers and losing them to competitors.

e.g of business like, Amazon & Expedia.

☆Make-to-Order and Mass Customization :

Make-to-Order⇨is a strategy of producing customized (made to individual specifications) products and services.

Mass Customization⇨produce large quantity of items, but customize them to fit the need and preferences of individual customers. Is also known as performing Make-to-Order on large scale.

e.g : Reebok & Dell.

☆E-Business and E-Commerce :

E-Commerce : is process of buying, selling, transferring, or exchanging products, services, or information electronically. While E-Business is a broader concept than e-business.

Competitive Advantage and Strategic Information Systems :

Competitive Advantage : an advantage over competitors in some measure such as cost, quality, or speed ; leads to control of a market and to larger-than-average profits.

Strategic Information Systems (SIS) : provide a competitive advantage by helping an organization implement its strategic goals and improve its performance and productivity.

Porter's Competitive Forces Model :

The best-known framework for analyzing competitiveness is Michael Porter's competitive forces model (porter,1985).

five forces are :

1] The threat of entry of  new competitors: is high when it is easy to enter a market and low when significant barriers to entry exist.

• A barrier to entry can be a product or service feature that customers expect from organizations in a certain industry.
• For most organizations, the Internet increases the threat that new competitors will enter a market (by creating their website).

2] The bargaining power of suppliers: is high when buyers have few choices and low when buyers have many choices.

• Internet impact is mixed. Buyers can find alternative suppliers and compare prices more easily, reducing power of suppliers
• On the other hand, as companies use the Internet to integrate their supply chains, suppliers can lock in customers.

3]The bargaining power of buyers: is high when buyers have many choices and low when buyers have few choices.

• Internet increases buyers access to information which result in increasing buyer power.
• Internet reduces switching costs, which are the costs in money and time, to buy elsewhere. This also increases buyer power. 
• in contrast, loyalty programs can reduce buyer power.

4]The threat of substitute products or services: is high when there are many substitutes for an organization's products or services and low where there are few substitutes.

• New technology create substitute products and web makes the information about these products available for all. As result, information based industries are in danger from substitute (e.g/ music, books, software..etc.). The Internet can convey these to  digital information quickly and efficiently.

5]The rivalry among existing firms in an industry: is high when there is fierce competition and low when there is not.

• The visibility of Internet applications on the web makes proprietary systems more difficult to keep secret. Which makes strategic advantage more short-lived.

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Strategies that organizations adopt to counter the five competitive forces & achieve competitive advantage.

➡Cost leadership strategy⇨produce products and/or services at the lowest cost in the industry.
e.g : Walmart automatic inventory replenishment system.

➡Differentiation strategy⇨offer different products, services, or product features.
e.g : Southwest Airlines & Dell.

➡Innovation strategy⇨introduce new products and services, put new features in existing  products and services, or develop new ways to produce them.
e.g : automated teller machines(ATMs).

➡Operational effectiveness strategy⇨improve the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals.

➡Customer orientation strategy⇨concentrate on making customer happy.

Porter's Value Chain Model :

This model identifies specific activities where organization can use competitive strategies for greatest impact.
Organization can be divided to two categories :
★Primary activities⇨Are those business activities that relate to the production and distribution of the firms products and services (core business), thus creating value for which customers are willing to pay. The primary activities are buttressed by supporting activities.
★Supporting activitied⇨are those business activities that do not add value directly to a firm products or services, but support the primary activities. Support activities include accounting, finance, management, human resources management, product & technology development (R&D) and procurement.

Business-Information Technology Alignment :

Business-information technology alignment :Is the tight integration of the IT function with the strategy, mission, and goals of the organization.
Six characteristics of excellent alignment :
↖Organization view IT as an engine of innovation that continually transforms the business often creating new revenue streams.
↘Organization view their internal & external customers and their customer service function as supremely important.
↖Organization rotate business and IT professionals across departments and job functions.
↘Organization provide overarching goals that completely clear to each IT and business employee.
↖Organization ensure that IT employees understand how the company makes (or loses) money.
↘Organization create a vibrant and inclusive company culture.

Reason behind failing organization in achieving these alignment :

• Business managers & IT managers have different objectives.
• The business & IT departments are ignorant of the other group's expertise.
• A lack of communication .

The Modern Organization Functioning in a Global Environment (Chapter 1)

      The Modern Organization Functioning in a Global  Environment

Information Technology (IT) : is all forms of technology (tool) used to create, store, exchange and use information.

Information System (IS) : is the combination of technology (the "what"), people (the "who") and process (the"how") that organization uses to produce and manage information.

It also known as the collection of technical and human resources that provide the storage, computing, distribution, and communication for the information required by all or some part of an enterprise.

 Information systems and information technology are parts of a broader computer science.Whereas information systems focuses on the system making use of technology, information technology focuses on technology and how it can help in disseminating information

Why Should I Study Information Systems?

presently we are dealing with different technological devices that we use them in our day to day activities. Also we practice continuous computing and we are surrounded by a personal, movable information network which is created by: digital devices like (labtops and smartphones), wireless networks and web-based tools. this network will enable us to pull information from the web or push our own ideas back to the web in anywhere at any time.

Informed User : a person who is knowledgeable about information systems and information technology.

The reasons why should to be an informed user?

informed users tend to get  more value  from whatever technologies they use. The benefits are:

•  They will benefit more from their organization's IT applications, because they will understand what is behind those applications.
•  They will be in a position to enhance the quality of their organization IT applications with their input.
•  Even as  new graduate, the informed users will quickly be in a good position within the organization, also they will help in selecting new information systems/applications that their organization will use. 
•  Being an informed user will keep them alongside of both new information technologies and rapid developments in existing technologies.
•  Help to improve their organization's performance, productivity and team work.
•  They can start their own business (entrepreneur).

Digital Nomad : is someone who uses information technologies such as smart phones, wireless, Internet access and web-based applications to work remotely from anywhere.

IT Offers Career Opportunities :

IT is vital for operations of modern business, it offers many employment opportunities. presently there are many will paid jobs exist in area such as :    

Mobile Commerce

E-Commerce



Security Network

 

 The top 30 jobs in America which are related directly to information technology are: 

• Software architect (#1)
• Database administrator (#7)
• Information systems security administrator (#17)
• Software development director (#18)
• Information technology manager (#20)
• Telecommunications and networking manger (#21)
• Network operation manager (#24)
• Information technology business analyst (#26)
• Information technology consultant (#28)
• Software development engineer (#30)

Why Managing Information System (MIS) in modern organization is difficult and complex task?

• Information systems have a huge strategic value to organization. the firm heavily rely on it ,if the system is not working (even a short time) the firm cannot function. this situation is called "being hostage to information system"
• Information system are very expensive to acquire,operate, and maintain.
• The evaluation of the management information system (MIS) function within the organization.

In contrast of  these complexity, in the modern organization computer are located in all departments and almost all employees use computers in their work.this situation is known as "end user computing" has led to a partnership between the MIS department and the end users.

the division of responsibilities for developing and maintaining information between MIS department and end users depends on several factors :

• The size and nature of the organization.
• The amount and type of IT resources.
• The organization attitudes toward computing.
• The attitudes of top management toward computing.
• The maturity level of the technology.
• The amount and nature of outsourced IT work.
• The countries which the company operates.

The MIS department is generaly responsible for corporate level and shared resources & The end users are responsible for departmental resources.

The Changing Role of the Information Systems Department :

Traditional Functions of the MIS Department :

• Managing systems development & system project management.    
  
• Managing computer operations including the computer center.
• Staffing, training, and developing IS skills.
• Providing technical services.
• Infrastructure planning, development, and control.

New (Consultative) Function of the MIS Department :

• Initiating and designing specific strategic information systems.
• Incorporating the Internet & electronic commerce into the business.
• Managing system integration including the Internet, intranets, and extranets.
  
• Educating the non- MIS managers about IT.
• Educating the MIS staffs about the business.
• Partnering with business-unit executive.
• Managing outsourcing.
• Proactively using business & technical knowledge to seed innovative ideas about IT.
• Creating business alliances with business partners.

Overview of Computer-Based Information Systems

Organization identify their management information systems functional area (department) by different names :

MIS Department, Information System (IS) Department, Information Technology Department, and Information Service Department.

Regardless of the names, however this functional area deals with the planning for-and development, management, and use of IT tools to help people perform all tasks related to information processing and management.

Defining Data, Information, and Knowledge :

Data : an elementary description of things, events, activities, and transactions that are recorded, classified and stored but are not organized to convey any specific meaning.

e.g : numbers (3.11, 4.34, 1.99) & characters (B, A, D, F).

Information : data that have been organized and structured within context, so that they have meaning and value to the recipient.

e.g : a grade point average (GPA) by it self is data, but a student name coupled with his or her GPA is an information. 

Knowledge : consists of data and/or information that have been organized and processed to convey understanding, experience, accumulated learning, and expertise as they apply to current business problem.

e.g : the class teacher applies rules if a score is much lower than average, then she need to discuss it with student to see what need to be done to improve it.

two type of knowledge :

Explicit Knowledge : is a formal and systematic, it can be expressed in words and numbers and can be easily communicated and shared in the form of hard data, scientific formulae, codified procedures or universal principles.

Tacit Knowledge : is knowledge that's difficult to write down, visualize or transfer from one person to another.

Computer-Based Information Systems (CBIS)

 Computer-based information system : is an information system that uses computer technology to perform some or all of its intended tasks.

The basic components of computer-based information system are :

Hardware : consists of device such as the processor, monitor, keyboard, and printer. Together these devices accept. process, and display data and information. 

Software : is a program or collection of programs that enable the hardware to process data.

Database : is a collection of related files or tables containing data.

Network : is a connecting system (wireline or wireless) that permits different computers to share resources.

procedures : are the instructions for combining the above components in order to process information and generate the desired output.

People : are those individuals who use the hardware and software, interface with it, or utilize its output.

Capabilities of Information Systems :

• Perform high-speed, high- volume numerical computation.
• Provide fast, accurate communication and collaboration within and among organization.
• Store huge amounts of information in small space.
• Allow quick, inexpensive access to vast amount of information worldwide.
• interpret vast amount of data quickly and efficiently.
• Increase effectiveness and efficiency of people working in groups in one place or around the world.
• Automate semiautomatic business process and manual tasks.

Information Technology Inside the Organization :

In the bottom side of the organization their will be IT Components (hardware, software, network, and database) which also known as information technology platform. IT Personal use these components to develop information systems, oversee security & risk, and manage the data. these activities cumulatively are called IT Service. the all three are categorized under IT Infrastructure. Information systems perform different tasks via a wide range of applications. An application is a computer program designed to support a specific task or business process. Each functional area or department within the organization use alto of application programs. The collection of application programs in a single department is usually referred to as departmental information system (functional area information system).

Types of Computer-Based Information System :

Breadth of Support of Information Systems:

IS support parts of organization :

# Functional Area Information Systems (FAISs) : also known as ( Departmental Area Information  Systems) it support a particular functional area within the organization for example (Accounting IS, Finance IS, Production/Operation Management (POM) IS, Marketing IS, and Human Resources (HR) IS).
e.g : System for processing payroll.

The use of IT systems in varied functional areas :
In finance & accounting : managers use IT to forecast revenue and business activities, to determine the best use of funds and sources, and to help auditors to ensure the accuracy of financial reports and documents.
In marketing : managers use IT to manage their relationship with their customers.

In manufacturing : managers use IT  to process customer orders, develop production schedules, control inventory levels, monitor product quality, and use IT to design & manufacture the products. these processes called computer-assisted design (CAD) & computer-assisted manufacturing (CAM)
In human resources : managers use IT to recruiting process, analyze and screen job applicants, and hire new employees.

IS support entire organization :

# Enterprise Resource Planning (ERP) systems : designed  to correct the lack of communication  among the functional area ISs. the reason behind innovation of ERP systems is that the various functional area ISs were often developed as standalone systems and did not communicate effectively with another. ERP system resolve this problem by tightly integrating the functional area ISs via common database.
e.g : Oracle, SAP system.

# Transaction Processing System (TPS) : supports the monitoring, collection, storage, and processing of data from the organization basic business transactions, each of which generates data.

e.g : transaction occurs each time the cashier in Carrfour swipes an item across the bar code reader  (point-of-sale (POS) System)

IS that connect two or more organization :

# Interorganizational Information Systems (IOSs) :  is a system between organizations, or shared information system among a group of companies.

Type of interorganizationa information systems (IOSs) :

Supply Chain Management System : is the flow of material's, information's, money, and services from suppliers of row material's through factories and warehouses to the end consumers.
e.g : (Walmare Retail Link System) connecting suppliers to Walmart.

Electronic Commerce (E-Commerce) Systems : system enable organization to conduct transaction called business-to-business (B2B) electronic commerce, and customers to conduct transactions with

business called business-to-customer (B2C) electronic commerce. E-commerce are typically Internet based.
e.g : www.dell.com

Support for Organizational Employees :

# Knowledge Workers : are professional employees such as financial and marketing analysts,engineers, lawyers, and accountants. All knowledge workers are experts in a particular subject area. They  also act as adviser to middle managers and executive.

# Office Automation Systems (OASs) : typically support the clerical staffs, lower and middle managers, and knowledge workers. These employees use OASs to develop documents (word processing and desktop publishing software), schedule resources (electronic calender), and communicate (e-mail, voice mail, videoconferencing, and groupware).
e.g : Microsoft Office.

# Business Intelligence (BI) Systems : provide computer-based support for complex, non routine decisions, primarily for middle managers and knowledge workers. (They also support lower-level mangers, but to a lesser extent).

# Expert Systems (ES) : attempt to duplicate the work of human experts by applying reasoning capabilities, knowledge, and expertise within a specific domain. They have become valuable in many application areas, primarily but not exclusively areas involving decision making.
e.g :Credit card approval analysis.

# Dashboards : (also called Digital Dashboards or Executive Dashboards) are a special  form of IS that support all managers of the organization.They provide rapid access to timely information and direct access to structured information in the form of reports.

e.g : status of sales by product.

How Dose IT Impact Organization ?

IT Reduce the Number of Middle Managers :

IT makes managers more productive & increases the number of employees who can report to the single manager. Thus, IT ultimately decreases the number of managers and experts. The coming year organization will have fewer managerial levels, fewer staffs, and line managers. 

IT Changes the Manager's Job :

One of the most important task of a managers is making decisions. A major consequence of IT has been change the manner in which managers make their decisions. IT often provides with near real-time information, which means the less time to make decisions, making their jobs even more stressful.

Will IT Eliminate Jobs ?

The computers continue to advance in terms of intelligence and capabilities, the competitive advantage of replacing people with machines is increasing rapidly. This process frequently leads to layoffs. At the same time IT create new jobs, such as electronic medical record keeping and nanotechnology. 

IT Impact Employees at Work:

Many people have experienced a loss of identity because of computerization they feel like "just another number" because computers reduce or eliminate the human element present in noncomputerized systems.

IT Impacts Employees Health and Safety :

The computerization has  benefited organization by increasing productivity, it also has created an ever-expanding workload for some employees. some workers feels overwhelmed and have become increasingly anxious about their job performance. This feeling stress and anxiety will affect the productivity in a negative way, also it create physical and mental problems for workers.The managers can reduce these problems by providing training, redistributing the workload among workers, and hiring more employees.

Designers trying to design better computing environment.

Ergonomics : the science of designing machines and work sittings that minimize injury and illness.The goal of ergonomic is to create an environment that is safe and comfortable.

IT Provides Opportunities for People with Disabilities :

IT can create new jobs oppertunites for people with disabilities by integrating speech- and vision recognition capabilities.

e.g : individual who can not type can use voice-operated kyboard, and individual who cannot travel can work at home.

Importance of Information Systems to Society : 

IT Affects Our Quality of Life :

The work place can be expanded from the traditional 9-5 jobs at central location to 24 hours a day at any location. Also IT provide employees with filxibility that can improve the quality of leisur time, even if it dose not increse the total amout of leisure time. on the other hand IT place employees on "constant call" which mean they never truly away from the office even they are on vecation.

Robot Revolution on  the Way :

A robot is a mechanical or virtual artificial agent, usually an electro-mechanical machine that is guided by a computer programs or electronic circuitry.

Type modern robots :

Mobile robot, Industrial robots (manipulating), Service robot, Educational robot, Military robots, Factory robots, Mining robots.

the advanteges of robots are :

• Quality : Robots have the ability to improve the quality of a product. They perform with precision with high repeatability.
• Production : Robots increase the speed of production. They are able to produce more than human workers because they work at a constant speed and do not have to pause for breaks, sleep, or vacations.
• Safety : Robots can increase the safety of a workplace.

However the disadvanteges of robots are :

• Expense : Robots are very costly to purchase, especially new robotic equipments. The cost of automation should also be taken into consideration. Robots also require regular maintenance which also is very costly.
• Expertise : There are much hassle that comes with the incorporation of robots into companies. Employees will need training on how to interact, program, and work with the new robotic equipment. Humans do not obtain the knowledge on how to work robots, but rather must learn about them. This process of obtaining information would require both time and money. 

Improvements in Healthcare :

Medical personal use IT to make better and faster diagnoses and to monitor

critically ill patients and moer accuratelly. IT also has efficient the process of researching and developing new drugs. Surgeons use virtual reality to plan complex surgeries. they also use surgical robots to perform long-distance surgery.Moreover docters discuss complex medical cases via videoconfrencing.